GMH management to address shortfalls - KUAM.com-KUAM News: On Air. Online. On Demand.

GMH management to address shortfalls

by Mindy Aguon

Guam - The Guam Memorial Hospital is in a financial crisis that could result in a cutback of critical services for patients and a shortened workweek for employees.  During Thursday night's board of trustees meeting, the hospital's dire financial situation was laid out, prompting the board to task management to develop a plan if there is a shortfall in payroll.

During last night's hospital board meeting, chief financial officer Siva Karrupan detailed how GMH has been unable to keep up with its vendor payments while at the same time meeting gross payroll. "We had $24 million in accounts payable and we only managed to borrow $12 million to pay off those obligations. So the remaining obligations are obligations that we have to meet based on our operating cash ability, so that has presented great challenges in the last seven to eight months," he explained.

"So we face this continuous battle, but most of the vendors we somehow manage to scrape up enough money to come up with partial payments to them."

But the small payments here and there haven't been enough for some off-island companies who have put GMH on credit hold, demanding payments within 45 days of the hospital receiving medical supplies or pharmaceuticals. Officials discussed that the hospital's inability to pay vendors could impact services, such as not being able to provide routine radiology procedures. GMH barely made a payment on Thursday to have clean linens for the weekend.

Despite efforts to cut back on costs by hiring ultrasound technicians instead of contracting them on a monthly basis and closing the Outpatient Hemodialysis Unit, Karrupan says it's just not enough. "What we really need to do is tighten our belt even further and build up a cash reserve. Right now the hospital has no cash reserve and if we have cash reserves we can face a rainy day whether it be a typhoon or a minor storm, so we have to anticipate in the coming months we are going to be facing a rainy day," he clarified.

The board has tasked management to review all options at saving money, which include a possible 32-hour workweek for administrative staff, similar to what's been implemented in Saipan. Said Karrupan, "It's something to take a look at and it's something to take a look at and see what the financial impact is going to be - how much savings is really going to be realized because the 32-hour workweek would only be applicable to the administrative staff."

The report is due to the hospital board by next week Wednesday. 

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